BSP support to FDI in retail lifts Sensex, closes 95 points up

Dec 6, 2012, 06.01PM ISTPTI

MUMBAI: The BSE benchmark sensex today wiped out early losses to close with a 95-point gain, extending its winning run to the third day, on late buying triggered by BSP throwing its weight behind government on FDI issue in Rajya Sabha.

After dipping to 19,186.24 intra-day on heavy profit booking, the sensex rebounded about 300 points to end at 19,486.80 — a rise of 94.94 points or 0.49% — on buying in Tata Motors, Sterlite, Bajaj Auto, Reliance Industries and HDFC.

The gauge has gained 182 points in three days to close at over 19-month high today.

However, IT stocks capped index's gains. Wipro, TCS and Infosys fell in 1.2-2.4% range on a weak dollar and interpretation of a Cognizant filing that triggered fears of slower-than-estimated growth in 2013.

The broad-based National Stock Exchange index climbed 30.40 points, or 0.52%, to a 23-month high of 5,930.90 led by stocks of realty, power and banking. Today's closing is the highest since Nifty closed at 6,048.25 on January 6, 2011.

Brokers said the buying activity gathered momentum after after BSP decided to support FDI in retail in the Rajya Sabha.

"We have decided to vote in favour of government on FDI in multi-brand retail issue tomorrow," BSP chief Mayawati, whose party has 15 members in the Rajya Sabha, said in Delhi.

After the government today shook off the Opposition challenge on the FDI in retail issue by getting approval of the Lok Sabha yesterday, the retail sector stocks picked up sharply. Provogue India and Koutons Retails closed with 5-7% gains.

"With government winning vote on FDI, the positive momentum is likely to accelerate further and Nifty could test levels of 6100 on move past 5950. Market sentiment would also be impacted by the ECB's latest policy decision which is due later today," said Amar Ambani, Head of Research, IIFL.

Key indices in Japan, Singapore and South Korea moved up by 0.07-0.81% while those from China, Hong Kong and Taiwan eased by 0.09-0.34%.

European stocks were trading up in the afternoon deals ahead of the European Central Bank's (ECB) and the Bank of England's (BOE) policy meeting later in the day. Key indices in Germany, France and UK moved up by 0.35-1.17%.

Back home, 22 scrips out of the sensex pack ended with gains while eight finished with losses.